BCCI scrambles to save Pepsi deal, says IPL credibility not reason for threat

MUMBAI: The Indian Premier League, which has seen its image take a beating after the 2013 spot-fixing scandal, suffered another blow on Friday with title sponsor PepsiCo expressing its intent of pulling out to the Indian cricket board (BCCI).
The beverage giant had bagged the five-year IPL title sponsorship contract in 2012 by paying Rs 396 crore -- almost double of what DLF had paid for the previous five-year period -- and is now said to be keen to pull out of the deal due to issues that have brought the game into "disrepute".
The danger of losing a major sponsor is a big challenge for new BCCI president Shashank Manohar. PepsiCo's payment was considered to be significantly high despite the eyeballs that the league was attracting. What's more, the soft drink market has in itself has slowed down over last year, hurting major players, including Pepsi.
PepsiCo had reportedly decided to pull out of the IPL deal last year itself, but the Board of Control for Cricket (BCCI) in India managed to convince them to stay on for another year. But the decision of the Supreme Court-appointed Justice Lodha Committee to suspend Rajasthan Royals and Chennai Super Kings seems to have firmed up the multinational's mind about terminating its association with the board. With CSK and RR going out, it will reduce their bang for the buck even if BCCI adds two more teams, since they would be still unknown commodities.
An embarrassed BCCI said in a statement that "steps will be taken to address PepsiCo's concerns," which was basically aimed at telling the world that it was still trying to salvage the deal and convince the sponsor to stay on.
A joint statement of BCCI and Pepsi later said; "BCCI and PepsiCo have had a longstanding cordial relationship and have been in discussions to work out a solution which addresses PepsiCo's concerns. Both parties will share it when ready".
IPL chairman Rajeev Shukla tried to play down the crisis, when contacted. "They have been a long-time partner. They'll keep associating with the IPL as one of the sponsors, if not the title sponsor. We're addressing their concerns, and they're addressing ours. We'll resolve all issues in an amicable manner," IPL chairman Rajiv Shukla told TOI on Friday.
Top BCCI and IPL officials, on conditions of anonymity, however said that Pepsi was trying to wriggle out of the contract. "Firstly, it has nothing to do with the 2013 IPL spot-fixing scandal. At the moment, they're concerned about the future of the IPL - whether it'd be a 6, 8, 10 or 12-team tournament. Secondly, they're not pleased with the publicity that they're getting out of the event vis-à-vis the other sponsors," he said. They've to pay us Rs 90-100 crore every year, which isn't a small amount," he said.
The matter is now set to be on top of the agenda of BCCI's Working Committee, which will meet in Mumbai on October 18.

Board bullish
Top Board officials, however, felt that Pepsi's decision was more to do with its "own financial problems" than the controversy surrounding the league. "It's a sham. Their pull out has nothing to do with the incidents in the IPL. They have sponsored two IPL editions since the scandal broke out. I think they're facing financial difficulties of their own. When we met them in the capital (as part of the IPL working group), they never gave an indication about this. In fact, we had a healthy discussion with their chairman and CEO for India region, D Shivakumar, about our future plans. They assured us their full support in whatever solution we would come up with," a top BCCI and IPL official told TOI on Friday.
Chetan Desai, BCCI's Marketing committee head, was confident that there would be no dearth of sponsors for the IPL in the future. "We would appreciate Pepsi to be there, but nobody is indispensable. Things may get blocked for some time, but we will get sponsors eventually. There may be a problem in the short run, but in the longer run, I don't think it should be an issue," Desai said. "Pepsi has derived much mileage out of the IPL. Their pull out may give an opportunity for someone else to be associated with the IPL," he added.
The Goa Cricket Association (GCA) president said he was surprised PepsiCo was willing to opt out of a deal with the BCCI at a time when a creditable official like Manohar had taken over as the chief of the cricket body. "Manohar has already assured a clean-up and transparency in the BCCI," Desai said.
WHAT AILS IPL?
CONTROVERSIES AND CREDIBILITY: Since its inception in 2008, the league has been involved in controversies. Be it the slap-gate affair involving Harbhajan Singh and S Sreesanth, the Lalit Modi twitter rant that made public Kochi's shareholding pattern which resulted in his ouster from the league and resulting in the resignation of Shashi Tharoor, the termination of franchises for non-payment of bank guarantee and the spot-fixing scandal, suspension of CSK and RR...the IPL has often been in the news for the wrong reasons.
QUESTIONABLE FINANCIAL VIABILITY: The Sahara group shelled out more than 1700 crore for the Pune franchise in 2010, thus making them the most expensive team in the IPL. Without a revenue model in place, the investment was bordering on disaster. It was no surprise that they could not give the bank guarantees on time and hence they were terminated in 2013. Kochi Tuskers, another franchise purchased in 2010 for Rs. 1533 crore, met the same fate after just one season. The health of some of the other franchises who are not moneyball teams is also not too great.
VIEWER FATIGUE: In 2011, India won the World Cup on April 2. Instead of allowing the players to enjoy a momentous win, the BCCI put them back on the road for the IPL and the above players metamorphosed into opponents which the crowds just could not lap.For large parts of the 2011 season, the league witnessed poor turnouts at venues and the TRPs too took a beating. Even today, after the first week, the interest seems to wane off till it picks up again towards the play-offs. There is a also a view that league is too lengthy.